This Factsheet takes a detailed look at a variation of money purchase schemes – which provide some measure of ‘promise’ to the emerging pension. Because of this ‘promise’, these schemes are regulated as defined benefit schemes.

In its simplest format, a money purchase scheme with a defined benefit underpin provides you with two alternative pension options from the same pension scheme. Whenever you draw your pension benefits, you will get the better of:

a ‘money purchase ’ element of the pension scheme

a ‘defined benefit’ element of the pension scheme

You will not receive two pension benefits: just the better pension from one of the two alternatives.

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